Not so fast with new fuel rules

City Commissioner Randy Leonard’s desire to slow global warming and reduce dependence on foreign oil is admirable — and absolutely in step with Portland’s prevailing philosophy of sustainability. His proposal to accomplish that goal through government mandates, however, is not acceptable. Encouraging the marketplace to utilize alternative fuels is a better strategy.
Leonard and fellow commissioners are considering whether to require all gasoline sold in Portland to contain at least 10 percent ethanol and all diesel fuel to include at least 5 percent biodiesel. Leonard is right to seek ways for this region to improve the environment and the economy. Investments in biofuels could create jobs that are a good match for Portland and for Oregon.
While requiring the use of biodiesel and ethanol might be a worthy symbolic gesture to companies considering Portland as a place to do business, city commissioners also need to be careful about the real-world effects of their actions. Alternative fuels have a natural appeal, but the evidence is decidedly mixed on whether they currently can help the environment, reduce energy consumption or truly aid Oregon farmers.

Studies conflict on ethanol

The first question that deserves further exploration is whether ethanol, which primarily is made from Midwestern corn, actually saves energy. It’s a difficult issue to reconcile, and even research conducted by legitimate scientists provides conflicting answers. Ethanol production requires large amounts of natural gas, and some researchers say making ethanol consumes more energy than the end product ultimately saves.
Others, including those who support the agricultural industry, argue there is a net benefit — although admittedly a modest one. Leonard himself concedes that an ethanol requirement in Portland might not do all that much to help the planet, but he included the ethanol component in his plan due to advice from environmental groups.
There also is the matter of supply and whether a mandate will create false shortages. Leonard’s plan includes fines, starting at $5,000, for vendors who fail to comply with the law. But what would happen to suppliers who can’t obtain biodiesel or sufficient quantities of ethanol and are still faced with the mandate?
Two states — Washington and Minnesota — have adopted ethanol and biodiesel mandates. In Minnesota, the law had to be suspended for 45 days this year while cold weather-related problems with biodiesel quality were resolved. In Washington, where the Legislature passed a 2 percent alternative-fuel requirement earlier this year, the governor also has the authority to suspend the mandate if problems develop.

Beware of unexpected consequences

Leonard’s proposal includes similar flexibility, but our preference would be that commissioners look to incentives and the marketplace to foster wider use of alternative fuels. Mandates have unintended consequences. Costs could rise, encouraging people to travel outside Portland to fill up their tanks — with the net result being more use of oil, not less.
It is crystal clear to us that Portlanders support the overall objective of improving the environment and weaning ourselves from overseas petroleum. We are just not convinced yet that ethanol and biodiesel mandates will further the cause.
The case for alternative fuels will become more persuasive as new technologies are employed to produce the fuels in a more efficient manner. And as Leonard notes, biodiesel in particular holds great promise. The best path in the meantime would be to use government incentives — not mandates — to encourage the transition from oil to better sources of energy.